Tax havens are engaged in economic warfare

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Nick Cohen has responded to all those (and there were quite a lot of them mysteriously mainly from tax havens) who defended Liechtenstein in the pages of the FT last week. As he put it:

All missed the point that tax havens are inherently criminal and would go under without the proceeds of crime.

And, as he added:

As John Christensen, director of the Tax Justice Network, puts it, they are enemy states, pirate islands that have declared economic war on the rest of the world. It's not just that they happen to be used by individual criminals - drug dealers, kleptomaniac African dictators - they are criminal entities themselves that survive by sucking potential revenues out of wealthy and destitute countries alike. If rich citizens obeyed the law, or tax havens ended their secrecy, offshore banking wouldn't exist.

John's words closely echo those I used on the BBC1 news on Friday night - and since John and I were in different countries with very little opportunity to speak to each other last week that might be coincidence.

Except it isn't. No doubt John made other points to Nick, as I did to the BBC, but the message both the BBC and the Observer chose to deliver was the same, which is that tax havens are engaged in economic warfare, on us the ordinary, law-abiding citizens of the world

This is the reality at the core of this issue. An elite in our society are using the legislation of tiny states, which they have through their agents in the banks, accountants and lawyers of the world the means to influence, to secure secrecy for their transactions which are designed to ensure that they shift their tax burden onto the ordinary people of the world through the imposition of ever bigger taxes on labour. Those people who suffer this increased burden represent the vast majority of the electors in the democratic states in the world: states that represent them but from which the rich wish to float free, as we have seen the UK's non-doms seek to do.

This is what Germany is signalling it's fed up with. This is what the OECD says has to stop. This is what decent people the world over think is unethical.

The increase in the wealth gap, which this practice has fuelled, has reached the point where people are saying 'enough'. If the rich have any sense they'll start paying tax pretty quickly. It's the only way they've got to preserve their position. Continuing to dodge has ceased to be acceptable.


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